RBI Boosts Real Estate: Banks Can Now Lend Directly to REITs

• The Reserve Bank of India (RBI) has permitted banks to lend directly to Real Estate Investment Trusts (REITs), subject to prudential safeguards.
• RBI Governor Sanjay Malhotra announced this measure on February 6, aiming to promote financing in the real estate sector.
• Previously, REITs primarily relied on borrowing through SPVs, issuing bonds, or raising equity from capital markets.
• Anshuman Magazine of CBRE stated this move, combined with the Union Budget 2026 announcement on CPSE assets under REITs, will significantly boost the asset class.
• Direct bank lending is expected to diversify REITs' funding base, reduce vulnerability to market volatility, and allow refinancing of high-cost debt.